Top News

Cyprus Bailout Plan: Reaction from the Front Lines

As Money Morning Chief Investment Strategist Keith Fitz-Gerald warned last week, the Cyprus bailout plan is a breach of trust that could derail the entire Eurozone.

Not only does the plan fail to fix the country's economy, it has the potential to seriously damage people's trust in the banking system, making a bad situation even worse.

"Individuals deposit money in banks instead of stuffing it in their mattresses because they believe that their money will be safe there," explained Fitz-Gerald. "Once they realize, or even suspect, that the money they put in the bank is anything but safe, they will take whatever's left and run – and the bank will collapse in spite of the "bailout.'"

To get an idea of what life on the ground in Cyprus is really like right now, Fitz-Gerald recently talked to FOX Business Network's Washington Correspondent Rich Edson. Edson has been reporting from Cyprus as the controversial bailout plan unfolds.

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The Fed

What You Absolutely Need to Know About Money (Part 5)

Chapter Four ended as a cartel of powerful bankers gathered on Jekyll Island to develop a plan for creating a central banking system which would work for their interests.

John Pierpont Morgan was no stranger to how central banks worked. He had witnessed their power firsthand.

Junius S. Morgan, Pierpont's father, became a partner at George Peabody and Company in 1854 and moved to London – where the American-born Peabody had been bankrolled by Baron Nathan Mayer Rothschild. At the time, the rich and powerful Rothschilds exerted extraordinary control over the Bank of England.

George Peabody and Company rode the mania for railroad shares, whose prices in 1857 were benefiting from the Crimean War's impact on rising grain prices, which Western railroads transported in huge quantities.

But the good times didn't last.

Hot Stocks

Three Stocks to Buy Now as Retailers Enjoy a Rally

When screening for good stocks to buy now, you may have noticed this year's continued climb for retailers.

The SPDR S&P Retail ETF (NYSE: XRT), a collection of nearly 100 stocks, ranging from apparel retailers to specialty stores to Internet retailers, has surged nearly 13% year-to-date. The more concentrated Market Vectors Retail ETF (NYSE: RTH) is up 9.6%.

Even some of the retail sector's dogs have gotten in on the act. Best Buy Co. Inc. (NYSE: BBY), a stock that was cut in half in the second half of 2012, has nearly doubled this year. After being dead money for several years, The Gap Inc. (NYSE: GPS) started breaking out in 2012 and has kept the good times going this year with a gain of nearly 13%.

Statistics like that might imply that investors who have been slow to embrace retail stocks may have already missed out on the easy money. That risk always exists following voracious broader market rallies, such as the one investors have been treated to over the past few months.

The good news is there are a few retailers that have more upside potential in store for the rest of 2013.

Hot Stocks

Once Its New Weight-Loss Drug Hits the Shelves, This Stock Is Headed 50% Higher

You don't have to be an expert to know that the FDA can literally make or break pharmaceutical stocks.

Depending on how the FDA rules, investors can either make a pile of cash or lose a bundle in a big sell off.

But here's something most investors don't know: There's another federal agency besides the FDA that can rear its ugly head at the worst possible time.

It's the U.S. Drug Enforcement Agency.

It's true. The same agency that chases coke and crack dealers also has the responsibility to regulate prescription drugs to make sure that patients don't abuse them.

That's one of the reasons why shareholders of Arena Pharmaceuticals Inc. (NasdaqGS:ARNA) aren't smiling all the way to the bank — yet.

Housing Market

These 5 Charts Prove the Housing Recovery is for Real – and Just Beginning

The housing market has rebounded in a big way, with home prices increasing the most since the housing bubble burst in 2006.

Prices aren't the only indicator pointed toward recovery.

Housing barometers including sales, permits and housing starts have surged well beyond their recession troughs and back into healthy territory – and bullish analysts say there's plenty more room for growth after years of decreased activity.

The housing market activity has been driven by pent-up demand, improved consumer confidence, low interest rates and still affordable prices. And the industry's comeback comes at a time when supply is tight. The inventory of homes available is at near-historic lows, and foreclosures have declined.

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Stock market today

Stock Market Today is Up, But is a Pullback on the Way?

A handful of economic data helped the stock market today (Tuesday) resume a robust rally – but are we due for a pullback?

The Dow Jones Industrial Average closed up 111.90 points, or 0.77%, at 14,559.65. The Standard & Poor's 500 Index jumped 12.08 points, or 0.78%, to 1,563.77 – just a couple points from its record high. The Nasdaq climbed 17.18 points, or 0.53%, to close at 3,252.48.

The broad-based stock market rally followed a sell-off Monday, which took the Dow down 64.28 points, or 0.4%, to close at 14,447.75. The S&P and Nasdaq both fell 0.3% as investors mulled a bailout deal for Cyprus.

But the old adage that investors have a very short memory rang true Tuesday. Shrugging off yesterday's woes, market participants instead focused on encouraging U.S. economic data.

Buoying stocks Tuesday was a Commerce Department report that showed durable goods orders surged 5.7% in February. That handily beat economists' expectations of a 0.5% rise and reversed January's 3.8% plunge.

A separate report Tuesday revealed single-family home prices began 2013 with the biggest annual increase in six-and-a-half years. The S&P/Case Shiller composite index report is a further sign of a recovery in the housing market.

But the big question is if the rally will last.

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Precious Metals

Gold Prices Will "Explode" When These Investors Start Buying

Until recently, an entire class of investors that control a huge pool of money – more than $27 trillion worldwide – have almost entirely ignored gold.

But lately, this group has begun to show more interest in the yellow metal, a trend that ultimately will exert massive upward pressure on gold prices.

We're talking about pension funds, which typically have had little interest in gold.

But with more traditional investments like bonds at historic lows, many pension funds aren't getting the returns they need to fund future obligations.

And with central banks debasing most major currencies and risking higher inflation, pension fund managers almost have no choice but to consider adding gold.

It's already started in Japan, which has about $3.4 trillion in pension funds – second only to the U.S., which has about $20 trillion.

In response to Prime Minister Shinzo Abe's pledge to spur inflation by printing more yen, Japanese hedge fund managers plan to double their gold holdings from about $500 million to $1.1 billion over the next two years, primarily by investing in gold exchange-traded funds (ETFs).

Itsuo Toshima, who represented the Tokyo office of World Gold Council for 23 years through 2011 and now advises Japanese pension fund managers, sees gold becoming a standard asset as inflation becomes more of a threat – with major consequences for gold prices.

"Pension money invested in bullion is "peanuts' at the moment," Toshima told Bloomberg News. "If 1% of their total assets shift to the metal, the gold market would explode."

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Energy Investing

What Germany's Energy Problems Can Teach Us About Our Own

Marina and I will soon board a plane for another trip to Europe.

We are off to Frankfurt, where I have meetings on European natural gas import costs; meanwhile, my better half gets to spoil our grandchildren, who live just outside the city.

My responsibility is to address the energy balance problems emerging for the continent. The focus may be on Germany and the rest of Western Europe, but these problems are emerging elsewhere around the world.

With Berlin opting to phase out nuclear power, the continent's largest economy now has a daunting task to assemble an energy mix that meets expected demand.

This started as a political tradeoff, but it is likely to become the major concern in the broader national strategy to stave off recession. A similar tradeoff is developing in the United States.

A much-ballyhooed German venture into solar and wind has hit a brick wall. There is now a played-down move to import additional nuclear-generated power from neighbors, but now the country is doing the unthinkable to meet its energy demands.

This environmentally conscious country, with one of the strongest green political movements in Europe, is now importing more coal than at any point in the past decade.

The options are limited, along with the time to decide on how to implement all of it. That is likely to result in a political tradeoff distasteful to just about every political party and interest group in Germany.

However, the problems do not end there.

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Hot Stocks

Dividend Stocks Held by Warren Buffett

You know dividend stocks belong in your portfolio, and you know Warren Buffett has made a fortune with this stock picks – so why not marry those ideas when hunting for profits?

Just looking at Buffett's 13F filing for Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) will show you which dividend stocks the famous investor is holding. The 2012 fourth-quarter filing shows that of 41 holdings, 29 are dividend stocks.

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Hot Stocks

Three Stocks to Buy Now

Money Morning Capital Wave Strategist Shah Gilani just came out with three investments he thinks are good buys right now. One is an oversold stock that Gilani thinks could possibly double in 18 months, another is "unloved" but ready to rebound, and a third will deliver gains as metals prices rise. Take a look at […]

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